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Banks’ lending through their agent banking channel rose by 177.53 per cent or Tk 1,274.7 in the January-April period of 2022 as a number of banks started exploring the cost-effective way of banking after the Covid outbreak.
The latest Bangladesh Bank data showed that the banks’ lending through the agent banking channel reached Tk 1,992.7 crore in the first four months of 2022 against their lending of Tk 718 crore in the same period of 2021.
However, the growth in the period under consideration was paltry 0.67 per cent or Tk 13.2 crore compared with the transaction of Tk 1,979.5 crore in the previous four months — September-December of 2021.
Of the amount disbursed in January-April of 2022, the customers in rural areas got Tk 1,313.8 crore and the customers in urban areas got Tk 678.9 crore.
In the first four months of 2020, the banks disbursed only Tk 220.3 crore through agents.
After the launch of the service in 2014, banks initially were only focused on deposit collections along with providing some other transaction services but lending.
After the Covid outbreak, the banks’ lending through agent banking reached a record high of Tk 587.9 crore in November 2021.
Bankers think that the agent banking would subsequently benefit the customers in the remote areas by the way of creating an atmosphere of competition in such areas where microfinance entities are dominating the market.
Though the microfinance entities are charging customers up to 25 per cent interest on loans, there is no other alternative for the rural people to borrow money, they said.
Since the lending rate through agent banking would be same as it is for the banks’ branch-based loans, the low-income people in the rural areas would get scope for borrowing at 9 per cent interest, they said.
Economists also believe that the agent banking would be popular among people and would obviously create competition for the microfinance entities.
Besides, the bank-based lending agent banking, the launch of nano lending of the mobile finance service operator bKash and a recent launch of refinance scheme of Tk 100 crore by the central bank for digital nano lending through MFS and other online platforms of the banks would also benefit people, they said.
Of the 29 banks operating agent banking service, BRAC Bank held the leading position in terms of lending with over 60 per cent market share.
BRAC Bank was followed by Bank Asia, The City Bank, Dutch-Bangla Bank and Al-Arafah Islami Bank.
Not only the lending, the agent banking also has been a source of deposits for the banks from the very beginning and the amount exceeded Tk 25,000 crore mark in April.
The amount of deposits in agent banking system of reached Tk 25,276.3 crore in April 2022 from Tk 17,919.9 crore in the same month of 2021.
In terms of deposit mobilisation, Islami Bank Bangladesh held around 40 per cent market share.
Islami Bank Bangladesh was followed by Dutch-Bangla Bank, Al-Arafah Islami Bank, Bank Asia and Agrani Bank.
At the end of April, total accounts with agents of the banks reached 1.55 crore.
(NA)
